Turning your finds into $$$$

**Steve in PR** · #1 (**permalink**) 04-05-2008, 12:31 AM

Now that you have found some silver or gold, you might have some that you really don’t need and want to convert into cash.

This thread will look at some of the options that people use to exchange their silver and gold for cash.

There are at least 3 things you can do with your finds.

Melt them
Sell them as jewelry
Sell them to a jeweler or precious metals buyer.

Each has its pros and cons. Let’s take each one and examine them but, before we do that, let’s set ourselves up for success by figuring out some basic information.

What you will need:

A calculator
A scale capable of weighing in grams or a similar weight system
A conversion program from the Internet that will calculate the value of your item once you know its weight. (Free)

Avoid selling or melting any jewelry without first having an idea of what the item is worth. The vast majority of people involved in the business are reputable people but there are a few shysters around who can take advantage of a situation if they think you are clueless.

Try to use an established, well-known business for your transactions if you are selling to a precious metals dealer, pawn shop or jeweler. Their reputation is at stake and they have worked hard to maintain a good reputation. It is not likely that they will risk their good name for a few dollars gain.

Make a list of each item you want to sell or exchange and, if you can, take a picture of it. Make out a short description of it, noting its weight, purity and it’s melted value.

We’ll talk about items with gemstones in another post.

Calculating the Value

You will need to have a scale capable of weighing in grams or dwt (Penny-weight).

I will use grams for our examples. Gold is measured in Troy ounces as opposed to a standard ounce. The difference is that a Troy ounce consists of 31.1 grams, as opposed to the more familiar 28 grams.

I take the total weight of the item in grams then multiply it by the decimal equivalent to the purity. For example, if it is 14 Karat, that would be .585 or 58.5% pure gold.

Using 10 grams of 14K as a gross weight for this example, the formula would be:

10 x .583 = 5.83 grams of pure gold

If gold is at $1000/ounce, divide 1000 by 31.1 (the number of grams in an ounce) and you get $32.15/gram net weight of 24 Karat gold

5.83 grams of gold x 32.15 = $187.43

For silver, the same basic rules apply. Most silver is 92.5% pure silver and is marked as either 925 or Sterling. The minimum silver content for an item to be marked as Sterling is 92.5%.

For example, let’s take an item that weighs 10 grams as its gross weight. Multiply 10 X .925 and you get 9.25 net grams of pure silver. Let’s assume silver is valued at $16/ounce. $16 divided by 31.1 grams to a Troy ounce = .514 cents a gram.

Take our net pure silver content of 9.25 grams and multiply it by .514 to get its net worth of $4.76.

Melting

Refiners will take a commission to cover their costs. The fee varies between refiners so make sure you know what it is that you are paying them and shop for the best deal. One refiner will base their commission on the weight of the items you send in. To another, the weight does not matter and their commission rate remains the same.

Some refiners will take everything you send them and take a sample of the purity of the melted batch and pay you based on that assessment. Others use specialized machines or chemical testing to assess the grade of each item.

Make sure you understand how your goods will be assessed and ask to be contacted prior to the actual melting with a yield estimate. With the gold market so volatile, it may pay to wait a day or 2 if you think the price of gold will rise significantly.

Pawn Shop or Jeweler?

I have no experience with pawning or selling gold to jewelers. I am sure that most are quite reputable but, as with any transaction, caveat emptor - Let the buyer beware, or in this case the seller.

Have an idea what your item is worth before you make the deal.

Sell the Item Outright

Some people prefer to sell their finds on FeeBay or Craigslist but you must be able to accept the liability that what you are selling is what you say it is. For example, if it is marked 14K and it turns out to be plated, you could be held liable for misrepresenting the goods. One friend told me that he always gets a higher price than the melt value by selling it outright. (He didn't tell me how much higher.)

How to Verify the Purity of an Item

If you have ever been to a jeweler or precious metal dealer before, you might have seen that they have a test kit they use to verify the purity of the gold they are buying. The most popular test kit seems to consist of a stone and a set of vials that contain dilutions of Nitric Acid and Hydrochloric Acid. These are combined to make "Aqua Regia" and lasts about 3 weeks. Undiluted Nitric Acid will indicate an item’s purity up to 12-Karat purity. Aqua Regia is used to test 14 Karat and up. This "acid test" is probably the most economic and dependable means of testing the gold content of an item. It is also dangerous to your eyes and skin and can leave a stain on white and green gold so the test should be performed in an inconspicuous area, applying the test solution directly to the piece.

The item can also be tested on a test stone. The tester takes the item and rubs it on the stone. The stone retains a small sample of the gold. They then take a sample of acid from the nitric acid and Aqua Regia vial with gold tipped needles and rub each one onto a separate area of the sample and look for a reaction. The reaction, or lack of reaction, will determine what the gold purity is.

Plated gold requires a more direct approach. A file is used to cut into the piece to get below any plating thickness and the acid is applied directly to the filed area and allowed to react with the gold to see if there is a different base metal underneath. It is a destructive test because it will leave a hole in the item.

Another alternative is to purchase a Test Pen (found on an auction site like FeeBay) for about $20. It is not as dangerous as the acid solution kits and will give you a good indication of the purity of gold, silver and platinum. It cannot tell you if the piece is plated, however, without cutting into the piece.

Now what?

Fortunately, many dealers/jewelers will do the test for you either for free or for a small fee. As I said before, have an idea what your item is worth before you sell and make the best deal that is acceptable to you!